WEBVTT - Puerto Rico's Economic Devastation Can Barely Be Measured 0:00:00.120 --> 0:00:03.880 Before Hurricane Maria made landfall on Puerto Rico three weeks ago, 0:00:04.200 --> 0:00:08.320 the U S territories economy was already in shambles, thanks 0:00:08.400 --> 0:00:11.879 in part to an overload of debt and an exodus 0:00:11.920 --> 0:00:16.239 of residents. Now, after this terrible storm, things are much 0:00:16.520 --> 0:00:19.759 much worse for the three point four million people there. 0:00:20.239 --> 0:00:25.600 Just fifteen percent of residents have electricity, are lacking clean water, 0:00:25.960 --> 0:00:29.840 and nearly half the phone services out. One estimate puts 0:00:29.840 --> 0:00:33.760 the damage at ninety five billion dollars, the equivalent of 0:00:33.800 --> 0:00:37.519 more than one year of Puerto Rico's GDP. So what 0:00:37.640 --> 0:00:40.880 does this all mean for Puerto Rico's economy? Will Puerto 0:00:40.960 --> 0:00:44.160 Rico even have an economy anymore? We'll talk to two 0:00:44.159 --> 0:00:46.600 people who will try to answer these questions and more 0:00:46.720 --> 0:00:59.000 today on Benchmark. I'm Scott Landman and economics editor with 0:00:59.040 --> 0:01:01.920 Bloomberg in wash Ington. Today we're going to look at 0:01:01.920 --> 0:01:06.520 Puerto Rico's economic devastation from two perspectives, One from someone 0:01:06.560 --> 0:01:09.040 who's been on the ground there, and then from someone 0:01:09.080 --> 0:01:13.319 who's very familiar with the territory's economy. So how bad 0:01:13.440 --> 0:01:16.280 is it there? Let's turn to one of our Bloomberg 0:01:16.360 --> 0:01:19.880 colleagues Jordan Holman, a reporter based in New York who 0:01:19.920 --> 0:01:23.280 spent seven days in Puerto Rico after the storm covering 0:01:23.280 --> 0:01:26.920 the situation there. Jordan's thanks for joining us today. Thanks 0:01:26.920 --> 0:01:29.320 for having me tell us a little bit about what 0:01:29.360 --> 0:01:31.800 you saw when you were there and how the hurricane 0:01:31.959 --> 0:01:35.520 disrupted life in Puerto Rico. So, Hurricane Maria very much 0:01:35.520 --> 0:01:38.560 disrupted life on the ground there in Puerto Rico. Like 0:01:38.640 --> 0:01:41.240 you mentioned at the top, most of the island was 0:01:41.400 --> 0:01:45.360 without electricity, cell service was down, a lot of the 0:01:45.400 --> 0:01:49.600 streets were not cleared because of utility poles, trees, and 0:01:49.720 --> 0:01:52.040 a lot of people did not have jobs to go to. 0:01:52.520 --> 0:01:55.600 Schools were out, and people had to bathe in the 0:01:55.720 --> 0:01:58.360 river because they did not have access to clean water. 0:01:58.640 --> 0:02:00.760 So it very much disrupted the way of life down 0:02:00.800 --> 0:02:03.480 in Puerto Rico, and it's going to be a year's 0:02:03.480 --> 0:02:06.760 long recovery until things get back to normal. And speaking 0:02:06.800 --> 0:02:10.240 of what normal life is like down there, from what 0:02:10.360 --> 0:02:14.120 I know about their economy, uh, there's there's tourism, of course, 0:02:14.120 --> 0:02:18.120 I visited there one time. There are some factories, especially pharmaceuticals, 0:02:18.760 --> 0:02:22.320 maybe some other industries too. Is it possible for anybody 0:02:22.360 --> 0:02:25.200 to get to work to get paid to do anything 0:02:25.320 --> 0:02:28.639 these days, so normal will fill dimfer for differ parts 0:02:28.680 --> 0:02:31.720 of the island. In San Juan, where tourism is um 0:02:31.800 --> 0:02:36.160 a big part of the economy more than people working tourism. 0:02:36.160 --> 0:02:38.919 In Puerto Rico, the hotels are starting to open up. 0:02:39.200 --> 0:02:41.960 You can see some cruise ships um, you know, docking 0:02:42.000 --> 0:02:45.600 in the waters there, and there's a huge concerted effort 0:02:45.760 --> 0:02:48.800 to try to jump start the economy with tourism and 0:02:49.040 --> 0:02:51.720 trying to tell people that uh, Puerto Rico is open 0:02:51.800 --> 0:02:55.680 for business. The Bacardi uh distillery down there, it's open 0:02:55.800 --> 0:02:59.320 and running. But outside of San Juan and the villages 0:02:59.400 --> 0:03:02.520 and the more mouth to this areas, that's where people 0:03:02.520 --> 0:03:05.239 are really trying to look for jobs and for opportunities. 0:03:05.480 --> 0:03:08.720 Because less of the roads are cleared there, schools aren't 0:03:08.760 --> 0:03:11.359 open and so parents are put in a tough spot 0:03:11.560 --> 0:03:14.720 of what to do next. So what you're saying, Jordan's is, 0:03:15.040 --> 0:03:17.760 you know, San Juan might be able to get back 0:03:17.800 --> 0:03:20.840 on its feet and get some touristspect but you know, 0:03:21.040 --> 0:03:24.560 for the vast, vast majority of the island is just 0:03:24.600 --> 0:03:27.240 going to be a very very long road back, And 0:03:27.440 --> 0:03:30.720 who really knows when things will ever get back to 0:03:30.800 --> 0:03:34.880 some normal stage off at all. Right Right now, many 0:03:34.920 --> 0:03:37.880 people are just looking for the commodities in life. They're 0:03:37.920 --> 0:03:42.000 looking for clean water, they're looking for housing, electricity. UM 0:03:42.160 --> 0:03:45.520 is huge issues right now, so focusing on getting those 0:03:45.560 --> 0:03:48.680 back up and running is very key. UM. Further outside 0:03:48.680 --> 0:03:51.720 of San Juan, and when it comes to the people 0:03:51.800 --> 0:03:55.240 that you talked to down there, even though its residents 0:03:55.280 --> 0:03:59.960 are American citizens, Puerto Rico has no representation in Congress. 0:04:00.720 --> 0:04:03.720 Do people there feel that Puerto Rico has been kind 0:04:03.720 --> 0:04:08.560 of invisible in some ways in this aftermath of the disaster. 0:04:09.080 --> 0:04:11.440 I mean, not that people don't know about it, but 0:04:11.720 --> 0:04:16.480 given its distance, the fatigue with other hurricanes like Irma 0:04:16.600 --> 0:04:19.800 and Harvey, that it's it's not really getting the attention 0:04:19.800 --> 0:04:23.560 and help that the people there deserved. The people I 0:04:23.600 --> 0:04:26.200 spoke to down there definitely acknowledged that there are a 0:04:26.200 --> 0:04:29.840 lot of other natural disasters happening right now. Um. There 0:04:29.920 --> 0:04:33.560 was Harvey UM in Texas and Erma and Florida and 0:04:33.640 --> 0:04:36.400 other parts of the Caribbean. Right now, there's forest fires 0:04:36.400 --> 0:04:40.280 in California. But everyone's stressed to me that while they 0:04:40.360 --> 0:04:43.120 understood that they still needed a they were still part 0:04:43.400 --> 0:04:47.679 of this country American citizens. They felt that Trump's visit 0:04:48.080 --> 0:04:49.960 it could have been a positive thing since he's the 0:04:50.000 --> 0:04:54.760 president and it brings media attention and resources. But as 0:04:54.880 --> 0:04:57.640 aid is still coming in, not everyone's receiving it in 0:04:57.720 --> 0:04:59.560 all parts of the island, and so that's a big 0:04:59.560 --> 0:05:02.000 focus right now to make sure that the aid is 0:05:02.040 --> 0:05:05.800 getting in reaching the people who need it most. Just 0:05:05.880 --> 0:05:09.400 one last question before we move on to our other guests. 0:05:09.839 --> 0:05:14.359 Is it possible to even rebuild Puerto Rico in a 0:05:14.440 --> 0:05:17.440 reasonable amount of time? We have a article out from 0:05:17.600 --> 0:05:20.680 some of our colleagues about how, uh, you know, the 0:05:20.720 --> 0:05:24.760 dead burden was so large that public employees like like 0:05:24.839 --> 0:05:28.520 police officers were already cut. I mean, everything was basically 0:05:28.800 --> 0:05:33.520 shambles already. Is it even possible to rebuild? You think 0:05:34.120 --> 0:05:38.040 Maria definitely didn't help the financial situation down in Puerto Rico, 0:05:38.600 --> 0:05:42.840 and the electrical grid needs to be rebuilt. Um the 0:05:42.839 --> 0:05:46.719 water situation needs to be handled as well. Right now, 0:05:47.279 --> 0:05:51.560 they're still in an emergency rescue recovery stage. But this 0:05:51.640 --> 0:05:54.200 is also could be looked at as an opportunity for 0:05:54.279 --> 0:05:57.560 a clean slate for rebuilding the infrastructure in a more 0:05:57.640 --> 0:06:01.320 durable way. Tesla said that, you know, they are looking 0:06:01.320 --> 0:06:05.680 into possibilities of rebuilding, and um Google has said that 0:06:05.680 --> 0:06:07.640 they're going to help with the cell service, so this 0:06:07.720 --> 0:06:10.160 could be a place where corporations can step in and 0:06:10.480 --> 0:06:12.880 help this effort. But it's definitely going to be a 0:06:12.960 --> 0:06:16.640 year's long recovery. That's uh, definitely what Friema impressed upon 0:06:16.680 --> 0:06:18.560 me while I was down there, that this is going 0:06:18.680 --> 0:06:21.200 to be a slow recovery and not everyone's going to 0:06:21.240 --> 0:06:23.760 fill it at the same time. So that's one thing 0:06:24.000 --> 0:06:27.240 that's gonna be a year's long recovery. Definitely sounds like 0:06:27.279 --> 0:06:30.960 a very, very difficult situation. Thanks, Jordan's so much for 0:06:31.240 --> 0:06:34.400 coming on today. Thanks for having me. All right, well, 0:06:34.480 --> 0:06:38.120 let's bring in Arthur McEwen. Now. He's a professor emeritus 0:06:38.160 --> 0:06:42.520 of economics at the University of Massachusetts in Boston. He's 0:06:42.680 --> 0:06:45.799 studied the Puerto Rican economy for more than twenty years, 0:06:46.120 --> 0:06:50.359 consulting to government and non government organizations, and publishing several 0:06:50.480 --> 0:06:54.760 articles for both academic and general audiences. Thanks for joining 0:06:54.839 --> 0:06:57.640 us on Benchmark today, Professor. I'm glad to be here. 0:06:58.320 --> 0:07:01.440 So from your person affect, can you just give us 0:07:01.440 --> 0:07:05.839 a little background here before this storm struck. If we 0:07:05.880 --> 0:07:08.599 can talk about Puerto Rico in some normal state, what 0:07:08.760 --> 0:07:11.880 have been the major components of Puerto Rico's economy over 0:07:11.920 --> 0:07:15.640 the years. Well, for the last ten years, Puerto Rico 0:07:15.760 --> 0:07:19.640 has essentially been in a recession. The economy has declined 0:07:20.200 --> 0:07:23.360 by well, there are various measures, but probably about fift 0:07:24.520 --> 0:07:28.280 since two thousand and six. You've mentioned, or your previous 0:07:28.360 --> 0:07:32.520 guests mentioned that there's been a large exodus. Hundreds of 0:07:32.520 --> 0:07:37.080 thousands of people, perhaps uh five hundred thousand have left 0:07:37.120 --> 0:07:40.280 the country and come to the United States as citizens. 0:07:40.280 --> 0:07:43.200 Of course they can move here easily, and that's made 0:07:43.600 --> 0:07:47.520 a big difference. That people leaving doesn't doesn't help the economy. 0:07:47.600 --> 0:07:51.840 To be sure, the recession itself has to be put 0:07:51.880 --> 0:07:55.920 in context in the sense that the Puerto Rican economy 0:07:56.200 --> 0:07:59.360 was falling further and further behind the US economy, growing 0:07:59.400 --> 0:08:03.560 slower than the US economy ever since uh and now 0:08:03.600 --> 0:08:06.600 of course it's going down well however slowly. The United 0:08:06.640 --> 0:08:11.560 States economy is going up. Um. There are several reasons 0:08:11.560 --> 0:08:14.600 for this that uh, that is, several reasons for the 0:08:14.680 --> 0:08:18.520 slow growth and then the development of the recession. All 0:08:18.600 --> 0:08:22.040 this comes before the hurricanes of course, although it's had 0:08:22.120 --> 0:08:25.520 hurricanes before, never never anything like this. In Puerto Rico, 0:08:26.520 --> 0:08:30.640 the the US government and the Puerto Rican government have 0:08:31.080 --> 0:08:38.160 focused excessively on manufacturing and attracting US firms manufacturing firms 0:08:38.200 --> 0:08:42.040 to Puerto Rico with very large tax breaks um. This 0:08:42.120 --> 0:08:46.840 has led to a distortion of the economy, a failure 0:08:46.880 --> 0:08:49.960 to focus on other industries, and hasn't done very much 0:08:50.080 --> 0:08:55.520 for employment in Puerto Rico. For example, manufacturing accounts for 0:08:55.600 --> 0:09:00.800 about forty of the Puerto Rican economic out would, but 0:09:00.960 --> 0:09:05.680 only eight of employment. You know that something is weird 0:09:06.000 --> 0:09:10.000 when those you hear those numbers. How is that possible? Well, 0:09:10.360 --> 0:09:14.600 it's possible because the firms operating in Puerto Rico have 0:09:14.800 --> 0:09:19.320 huge profits and because they basically don't pay any US 0:09:19.400 --> 0:09:23.400 taxes or Puerto Rican taxes very little on their activities. 0:09:23.440 --> 0:09:27.160 So what this is under particular U s laws. Some 0:09:27.240 --> 0:09:29.679 of those laws have been changed, but the situation has 0:09:29.720 --> 0:09:34.679 not changed dramatically in in recent years, so it's not 0:09:35.000 --> 0:09:39.880 And it costs more in lost taxes UH to to 0:09:39.960 --> 0:09:42.880 increase a job, to make a job in Puerto Rico 0:09:43.320 --> 0:09:47.480 than the salary of the job. So it's not a 0:09:47.559 --> 0:09:53.000 very good policy. But also this focus on manufacturing, which 0:09:53.040 --> 0:09:55.520 I don't think has paid off that well for Puerto Rico, 0:09:55.880 --> 0:10:00.600 has led to neglect of other sorts of industry on 0:10:00.600 --> 0:10:04.320 on the island. I mean, you mentioned earlier that they're 0:10:04.360 --> 0:10:06.959 counting on tourism to do something. Well, it's a little late, 0:10:07.000 --> 0:10:11.240 I'm afraid. UM. For the last twenty years, the amount 0:10:11.520 --> 0:10:15.120 the number of tourist arrivals has been basically flat in 0:10:15.200 --> 0:10:19.800 Puerto Rico since about If you compare this with the 0:10:19.880 --> 0:10:26.320 Dominican Republic, which started off with less tourism than Puerto Rico, 0:10:26.440 --> 0:10:28.720 now is much larger in terms of the number of 0:10:28.760 --> 0:10:32.719 tourists that come there. The reason behind this looks very 0:10:32.800 --> 0:10:37.480 much like the government of the Dominican Republic has increased 0:10:37.520 --> 0:10:42.080 its spending year after year in support of tourism. In 0:10:42.160 --> 0:10:47.120 Puerto Rico, the government spending on tourism has been basically flat. 0:10:47.520 --> 0:10:51.800 The kind of infrastructure that might develop Puerto Rico, the 0:10:51.880 --> 0:10:56.000 advertising campaigns that might develop tourism and Puerto Rico, those 0:10:56.040 --> 0:10:59.760 haven't been there. UH. And the other examples come up 0:10:59.760 --> 0:11:03.920 for UH. One case is agriculture, which has just been 0:11:03.920 --> 0:11:07.280 devastated in Puerto Rico over the years of course it's 0:11:07.320 --> 0:11:11.120 even more devastated now with the with the hurricane UH. 0:11:11.160 --> 0:11:13.680 And of course the decline in agriculture is part of 0:11:13.720 --> 0:11:17.800 economic progress has shift to a more urban and industrial economy, 0:11:18.120 --> 0:11:21.520 but in Puerto Rico it went much further. UH. There 0:11:21.640 --> 0:11:26.080 is no attention, little government extension programs to build up agriculture, 0:11:26.440 --> 0:11:30.160 to find the appropriate things. Puerto Rico now imports, by 0:11:30.200 --> 0:11:35.000 some estimates, over of its food. UM. Now it's not 0:11:35.520 --> 0:11:37.679 the best place in the world for agriculture. A lot 0:11:37.679 --> 0:11:43.000 of the island is is very mountainous. Nonetheless, there's certainly opportunities. 0:11:43.040 --> 0:11:46.880 And furthermore, UH, there's very little export of crops to 0:11:46.880 --> 0:11:50.600 the United States, whereas there are plenty of crops that 0:11:50.840 --> 0:11:53.120 could be grown in Puerto Rico, and some are some 0:11:53.160 --> 0:11:56.800 are it's not totally zero UH for export to the 0:11:56.880 --> 0:11:59.960 US market, but very little has been done by government 0:12:00.040 --> 0:12:03.280 to help with the finance, the marketing, the extension programs 0:12:03.840 --> 0:12:06.120 that agriculture needs to get going. Those are just a 0:12:06.160 --> 0:12:09.200 couple of examples of the neglect that has been there 0:12:09.360 --> 0:12:12.800 for for quite a while. Well, they're always figuring out 0:12:12.800 --> 0:12:16.640 new ways to give tax breaks to manufacturing, which is 0:12:16.679 --> 0:12:19.839 not driving the economy. Now let me let me interrupt you. 0:12:19.920 --> 0:12:21.920 Let me interrupt you for a second. So we we've 0:12:21.920 --> 0:12:27.600 had these decades of failed economic policy experiment basically in 0:12:27.760 --> 0:12:31.400 Puerto Rico, like Jordan was saying, companies like Google and 0:12:31.440 --> 0:12:35.520 Tesla are looking at ways of getting the electrical grid 0:12:35.559 --> 0:12:39.520 back online or the telecom infrastructure. Is a time for 0:12:40.000 --> 0:12:45.200 more radical economic experiments that could encourage that sort of thing, 0:12:45.480 --> 0:12:47.760 or do we really need to go back to basics 0:12:47.840 --> 0:12:50.800 and see, all right, you have a tropical location, let's 0:12:50.800 --> 0:12:54.800 put in a tourist infrastructure that that's that really works 0:12:54.800 --> 0:12:57.480 and that could actually attract visitors. Well, I think the 0:12:57.520 --> 0:13:00.600 answer is both. That is, it would be fine to 0:13:00.840 --> 0:13:04.240 start developing the tourist industry, but at the same time, 0:13:04.640 --> 0:13:07.440 there has to be something done about the electrical regrid. 0:13:08.040 --> 0:13:10.720 You shouldn't let a good crisis go to waste, uh, 0:13:10.840 --> 0:13:14.240 as somebody has many people have said. But the look, 0:13:14.840 --> 0:13:19.839 the electrical system in Puerto Rico has been very inefficient 0:13:20.120 --> 0:13:25.480 and very expensive. Uh. This is an opportunity to rebuild 0:13:25.480 --> 0:13:28.319 it in a way that is not only less expensive, 0:13:28.559 --> 0:13:34.319 more efficient, but also it will withstand hurricanes to a 0:13:34.440 --> 0:13:38.400 degree possible and also could be green. After all, green 0:13:38.600 --> 0:13:44.440 energy is becoming competitive in the United States, where where 0:13:44.559 --> 0:13:48.120 energy costs or energy prices are much lower than in 0:13:48.160 --> 0:13:51.440 Puerto Rico. Puerto Rico recons pay about twice what we 0:13:51.520 --> 0:13:55.320 pay in the States for electricity, so certainly green energy 0:13:55.800 --> 0:13:59.800 is viable. It could also be decentralized in a way 0:13:59.840 --> 0:14:03.480 that you wouldn't have the whole island being out as 0:14:03.520 --> 0:14:06.400 it virtually is is now. Just put in a whole 0:14:06.400 --> 0:14:08.960 bunch of solar panels and you could probably produce a 0:14:08.960 --> 0:14:11.560 lot of power, right Solar planels and wind as well 0:14:11.640 --> 0:14:16.400 could could be very important. And incidentally, uh, you mentioned 0:14:16.400 --> 0:14:18.959 Tesla and Google. I don't know about Google, but not 0:14:19.000 --> 0:14:22.960 only Tesla, but also a German firm is already bringing 0:14:23.000 --> 0:14:27.520 in many units for local generation of electricity through a 0:14:28.000 --> 0:14:32.240 some sort of U sun and power and also with 0:14:32.480 --> 0:14:36.640 battery systems that I frankly can't can't explain to. But 0:14:36.800 --> 0:14:39.520 that's already going on. So it does seem like they're 0:14:39.560 --> 0:14:43.000 going to need, you know, real major work to rebuild 0:14:43.000 --> 0:14:46.200 the economy, rebuild the electrical grid, and some probably some 0:14:46.240 --> 0:14:49.520 pretty innovative solutions. Let me turn to a topic that 0:14:49.880 --> 0:14:52.880 interests me personally. Actually as part of my day job. 0:14:52.920 --> 0:14:55.800 For the nine of the time that I don't actually 0:14:55.840 --> 0:15:00.120 spend recording the Benchmark podcast, I edit our dated a 0:15:00.240 --> 0:15:06.120 coverage of US economic indicators like employment, GDP, inflation, and 0:15:06.160 --> 0:15:09.480 so on. So when I was thinking about this topic, 0:15:09.560 --> 0:15:13.200 I was saying, well, let's look at economic data and 0:15:13.240 --> 0:15:15.880 Puerto Rico. And then I was looking at economic data 0:15:15.920 --> 0:15:18.440 and Puerto Rico, and there there really isn't much to 0:15:18.480 --> 0:15:22.800 speak of. Either it either doesn't exist or the estimates 0:15:22.800 --> 0:15:26.920 that are there are not really reliable. Um, why don't 0:15:26.920 --> 0:15:32.680 we have any real reliable current estimates of GDP, labor market, 0:15:32.760 --> 0:15:35.520 consumer spending like we do for the rest of the 0:15:35.600 --> 0:15:39.840 United States. First of all, the United States agencies such 0:15:39.880 --> 0:15:43.200 as the Bureau of Labor Statistics and the Bureau of 0:15:43.200 --> 0:15:48.320 Economic Analysis are only responsible for parts of of Puerto 0:15:48.400 --> 0:15:51.440 Rican data. Puerto Rico by and large has its own 0:15:51.560 --> 0:15:56.480 own data system, and being outside the U S data system, 0:15:56.480 --> 0:15:59.400 a lot of data is not well collected. I mean, 0:16:00.040 --> 0:16:03.800 we have the gross national product data, for example, which 0:16:03.840 --> 0:16:07.200 is the measure of growth and so on in the 0:16:07.240 --> 0:16:11.680 Puerto Rican economy, but they use nineteen fifty four prices 0:16:12.480 --> 0:16:18.200 in order to calculate currentum current output in the economy 0:16:18.360 --> 0:16:22.200 nineteen fifty four. Now, I think the US government, the 0:16:22.200 --> 0:16:24.680 Bureau of Economic Analysis, they they look at I think 0:16:24.760 --> 0:16:28.360 it's prices, for example. Well, they're always updating it. I 0:16:28.360 --> 0:16:31.240 mean in the United States. But as long as I've 0:16:31.280 --> 0:16:34.120 been looking at Puerto Rico, it's nineteen fifty four. Well, 0:16:34.120 --> 0:16:38.280 that's absurd. Things change tremendously. New products are produced that 0:16:38.360 --> 0:16:41.640 weren't even in existence in nineteen fifty four. Uh, and 0:16:42.160 --> 0:16:45.280 old products that were important in nineteen fifty four go 0:16:45.400 --> 0:16:49.040 out of use. Those data are very unreliable. Puerto Rico 0:16:49.160 --> 0:16:53.080 is invisible in the main economic statistics like the unemployment 0:16:53.160 --> 0:16:56.040 rate and GDP that pertain to the whole US, even 0:16:56.080 --> 0:16:59.640 though even though it's residents are considered US citizens, but 0:16:59.680 --> 0:17:03.360 it's part of this status. This the status in the 0:17:03.440 --> 0:17:05.720 United States where it's part of the United States but 0:17:05.760 --> 0:17:07.760 not part of the United States. Well, it's a colony 0:17:07.760 --> 0:17:11.240 of the United States. I mean that even though it's 0:17:11.280 --> 0:17:16.159 meant it's people are are citizens. Um, it's controlled by 0:17:16.160 --> 0:17:19.320 the United States. Ultimate authority is with the United States government, 0:17:19.720 --> 0:17:22.560 but it has a certain degree of autonomy, and one 0:17:22.560 --> 0:17:24.000 of the areas in which it has a great deal 0:17:24.040 --> 0:17:27.720 of autonomy is in statistics, and the government simply has 0:17:27.760 --> 0:17:31.480 not given priority to the development of good statistical systems. 0:17:31.520 --> 0:17:35.960 And moreover, those the statistics that are gathered are often 0:17:36.000 --> 0:17:40.560 politically used and politically controlled. I'll give you one example, 0:17:40.640 --> 0:17:44.080 when the head of the Institute of Statistics in Puerto 0:17:44.160 --> 0:17:47.520 Rico realized that there were serious problems with the consumer 0:17:47.600 --> 0:17:52.120 price index and recalculated it. The government told him not 0:17:52.200 --> 0:17:55.040 to let this go public, and after a while he 0:17:55.160 --> 0:17:58.000 let it go public anyway, and they tried to fire him. 0:17:58.920 --> 0:18:01.000 They didn't succeed, but because it had a certain amount 0:18:01.040 --> 0:18:05.520 of autonomy. Another example is that the the legislature in 0:18:05.560 --> 0:18:09.960 Puerto Rico passed the law that said the government Development 0:18:10.000 --> 0:18:13.520 Bank should not release any economic statistics in the year 0:18:13.920 --> 0:18:17.960 before up leading up to an election. If we got 0:18:18.000 --> 0:18:20.440 any of that in the United States, you would you 0:18:20.440 --> 0:18:25.160 would have the endless congressional hearings and recriminations and so on. Right, So, 0:18:25.520 --> 0:18:29.879 those were clearly efforts to use the data system politically 0:18:29.880 --> 0:18:32.280 which were problems. Now, I mean, I don't mean it's 0:18:32.320 --> 0:18:36.760 all absolutely useless. I think that the employment data, for example, 0:18:37.040 --> 0:18:40.199 are of some use. Then I just we mentioned that 0:18:40.280 --> 0:18:44.560 before the storm's hipped. The August data showed that which 0:18:44.600 --> 0:18:47.119 is the most recent data we have, that unemployment was 0:18:47.200 --> 0:18:51.760 running at almost twelve in Puerto Rico. Now I hesitate 0:18:51.840 --> 0:18:55.480 to guests. I mean, if they're twelve percent employed, that 0:18:55.520 --> 0:18:58.720 would be high. The Puerto Rican debt is you know 0:18:58.760 --> 0:19:02.679 that that's the overhang on this whole situation. But if 0:19:02.720 --> 0:19:06.600 you can boil that down to uh ten seconds, how 0:19:06.680 --> 0:19:08.520 how is that going to play out? Well, I just 0:19:08.520 --> 0:19:12.280 say with the debt, the President said it has to 0:19:12.280 --> 0:19:14.400 be wiped out. He hasn't got authority to do that, 0:19:14.600 --> 0:19:17.320 but they have to find some way to greatly reduce 0:19:17.400 --> 0:19:19.399 the burden of the debt and Puerto Rico or the 0:19:19.480 --> 0:19:23.840 situation is basically hopeless. Well, on that note, on that 0:19:23.920 --> 0:19:27.320 hopeful note, we're gonna have to leave it there. Arthur, 0:19:27.440 --> 0:19:30.480 thank you so much for speaking with us today. Thank you. 0:19:33.320 --> 0:19:35.679 Benchmark will be back next week and until then, you 0:19:35.680 --> 0:19:38.600 can find us on the Bloomberg terminal, Bloomberg dot com, 0:19:38.680 --> 0:19:42.440 or Bloomberg app, as well as on Apple Podcasts, pocket casts, 0:19:42.480 --> 0:19:45.000 and Stitcher. While you're there, take a minute to rate 0:19:45.000 --> 0:19:47.320 and review the show. Some more listeners can find us 0:19:47.560 --> 0:19:49.040 and let us know what you thought. Of the show. 0:19:49.200 --> 0:19:52.040 You can follow me on Twitter at at scott Landman, 0:19:52.359 --> 0:19:54.920 and Jordan Holman is at at j O R t 0:19:55.240 --> 0:19:59.439 y N Journals. Benchmark is produced by Sarah Patterson, the 0:19:59.480 --> 0:20:03.159 head of Burt Podcasts Instagrancesca lead. Thanks for listening, to 0:20:03.240 --> 0:20:04.000 see you next time.